Ask just about anyone what’s keeping Cuba’s wrecked economy alive right now, and they’ll tell you it’s the communist island’s capitalist businesses — the private sector that’s widely viewed as a key engine of independence from the repressive regime.
And this year the Trump administration has recognized the Cuban private sector's importance.
Or, well, maybe it hasn’t.
“I have to say," said prominent private Cuban entrepreneur Aldo Alvarez, "I — I’m confused.”
Alvarez runs Mercatoria, a private Havana distributor of food and other products, most of which he imports from the U.S.
His and similar businesses in Cuba — known as mipymes, the Spanish acronym for micro, small and medium enterprises — are far more productive and efficient than the country’s fossilized state-run enterprises.
So last February, after the Trump administration imposed a de facto blockade of fuel shipments to the Cuban government in its campaign to push it out of power, it let the mipymes import fuel from U.S. companies like Vanguard Energy in Coral Gables so they could keep operating — and keep Cubans from starving.
“On the one hand, U.S. authorities are saying that Cuba is avoiding a real deep humanitarian crisis because a private sector exists,” Alvarez told WLRN from Havana.
But on the other hand, Alvarez says, the Trump administration seems to prefer the world think Cuba's private sector really doesn't exist.
“All the messages I’m receiving from the U.S. administration are contradictory,” Alvarez said.
For starters, Alvarez says he was recently detained upon arriving at Miami International Airport on a business trip.
He says U.S. authorities told him Cuba’s private sector is just a financial front for Cuba’s regime, and they took away his U.S. visa. Several other Cuban private entrepreneurs have had theirs canceled this year too.
“Now, U.S. authorities don’t seem to have a good opinion about the Cuban private sector," Alvarez said. "They weren’t very friendly at all.”
The State Department does not comment on individual visa denials. Either way, Alvarez’s case points up a baroque reality:
First, as the Trump administration tightens the economic sanctions screws on the Cuba's communist dictatorship, it’s relying on Cuba’s private sector to keep Cubans at least minimally fed.
"In the last nine months, the U.S. private sector has engaged with the Cuban private sector more than at any time in the last 67 years" since the the country's communist revolution came to power in 1959, said John Kavulich, president of the nonprofit U.S.-Cuba Trade and Economic Council in New York.
At an Association for the Study of the Cuban Economy conference at Florida International University last month, former Harvard professor Jorge Dominguez noted that Cuba's "burgeoning private sector remains a lone dynamic engine of survival," accounting for as much as 80% of the island's retail activity today.
But at the same time, the Trump administration is tacitly if not hypocritically discrediting Cuban capitalism as a phony sham in cahoots with the regime — because that’s what Miami’s conservative Cuban exiles, a key Trump constituency, insist it is.
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“You end up with this tortured relationship,” said Ricardo Herrero, executive director of the nonprofit Cuba Study Group in Washington D.C., which promotes Cuba’s private sector and rejects the notion that its entrepreneurs are all "testaferros," or agents of the regime.
“This administration wants to push Cuba to the brink, but not force it over the precipice into a full-blown collapse that it knows it will then own," Herrero said.
"So, it leaves the island on life support, with the United States the primary provider of that support, the fuel and the chicken and the basic hygiene products, flowing through the Cuban private sector — but not doing more to empower or formally recognize that private sector.”
"Everything feels upside down — just as the Cuban government makes things easier for us, U.S. sanctions make it harder for us to take advantage of it."Private Cuban entrepreneur Marta Deus
Amid prolonged electricity blackouts, food shortages and uncollected garbage piling up on streets — an emergency wrought by both stepped-up U.S. sanctions and decades of disastrous state mismanagement — Cuba's regime is admittedly desperate.
And, whether one agrees with Trump's pressure policy or not, it has prompted Cuba to at least open up its economy if not its iron-fisted political system.
This summer the regime — which is usually finding new ways to handcuff the private businesses — issued sweeping reforms that give that fledgling but growing sector much wider latitude to operate. Private entrepreneurs can now own more than one company, for example, and receive direct foreign investment and financing.
It is now even renting out gas stations belonging to the state-run oil company CUPET to private enterprises like Alvarez's Mercatoria, so they can more effectively distribute the U.S. fuel imports.
But last week the Trump administration revoked a Biden administration measure allowing private Cuban business owners to open U.S. bank accounts that can better facilitate their transactions and financing.
That cancellation isn't a large practical blow. Few if any Cuban private entrepreneurs actually have U.S. accounts — because, despite the official U.S. permission, U.S. banks have balked at it for fear of running afoul of the larger U.S. economic embargo against Cuba, which prohibits direct banking between the U.S. and Cuba.
Psychological smackdown
Still, last week's announcement was a big psychological smackdown for private Cuban business owners. It all but shut down hope that they'll be able to access the U.S. banking system — and lower the costs of import transactions that now have to go through fee-charging intermediaries in third countries like Panama and Spain.
"That is the most important thing to them and their growth," said Kavulich. "Being able to move money more efficiently."
As a result, Cuban entrepreneurs say they feel betrayed.
"Everything feels upside down," said Marta Deus, who runs a popular private food delivery and product logistics service in Cuba called Mandao.
“Just as the Cuban government makes things easier for us, U.S. sanctions make it harder for us to take advantage of it.”
READ MORE: Menace and Myth: Cuba's private sector faces regime and exile mistrust
Politically, though, it's precisely the Cuban private sector’s success that's working against it.
So far this year U.S. exports to Cuba are up 62% — thanks largely to those more efficient private enterprises receiving them. But that irritates many Miami exiles, who see it as proof Cuba isn’t being squeezed hard enough to bring regime change.
This year Republican Cuban-American Congresswoman Maria Elvira Salazar held hearings calling the Cuban private sector "a myth" whose business owners are linked to the regime and should have their U.S. visitor visas revoked.
That may be true of a scant portion, say Cuban experts like Herrero and Kavulich, but there is little if any proof that it is for most.
"This is like a Berlin airlift, and capitalism is taking over. Isn't that what the U.S. government always wanted? Seems to me Cuban exiles are sore winners in that regard."Joe Garcia, former Miami Congressman
Entrepreneurs like Alvarez and Deus, for example, have no demonstrable personal or professional ties to the Cuban state.
One who definitely does, however, is Carlos Miguel Pérez. He's a deputy in the National Assembly, a member of the communist party — and the owner of a private software company called Dofleini.
Pérez is an economic reformist who stumps for the expansion of Cuba's private sector. But he doesn't do it any PR favors in the U.S. by dismissing what most people outside Cuba see as one of its overarching purposes — to undermine the Cuban regime by spreading the ethos of independence from that regime.
For one thing, Pérez feels the private sector should be off-limits to "services reserved for the state" like schools and healthcare. And he doesn't see it weakening the regime.
"We're not dying," Pérez told WLRN. "We're of course having a terrible time with these criminal Trump administration actions against us. But we will survive. We will prevail — and then we're looking to have a normal relationship with the U.S., one that's open to negotiations."
Because of the likes of Pérez, Salazar told NPR this year, "My community will never allow anything that has to do or smell like ... the repressive apparatus" in Cuba to flourish — including the private sector "myth."
Cuba watchers such as former Miami Congressman Joe Garcia say that rhetoric flows from conservative exile dogma — which considers it heresy to acknowledge a genuine, functioning private sector in Cuba.
“The problem," said Garcia, a Cuban-American Democrat who consults U.S. business on Cuba's private sector, "is that in Miami you’re not allowed to say anything works in Cuba.”
Garcia recently visited Havana and says he saw an improvement in Cubans’ economic lives.
"Earlier this year the streets were so deserted my driver didn't bother slowing down at intersections," Garcia said.
"Now, on this latest visit, there was traffic, because of the economic life created by the mipymes.
"Three months ago, a liter of diesel in Cuba was selling for somewhere between eight and ten dollars. A liter now is $2.60. This is like a Berlin airlift, and capitalism is taking over. Isn't that what the U.S. government always wanted?
"Seems to me Cuban exiles are sore winners in that regard."
Though they’re political rivals, Garcia credits much of this to the pragmatic approach of Trump’s point man on Cuba, Secretary of State Marco Rubio, another Miami Cuban-American.
Still, speaking about Cuba on Fox News last week, Rubio made no mention of a private sector independent of the regime helping prevent humanitarian catastrophe .
“There is no Cuban economy that benefits the Cuban people," Rubio asserted, seemingly dismissing any benefits rendered by the private sector economy.
"Anything that had a chance of making money in Cuba was controlled by the Cuban military and the Cuban Communist Party," Rubio added, "to line the pockets of a handful of people at the expense of the entire country.”
For now, Cuba’s private entrepreneurs will just have to accept that what the Trump administration says on U.S. TV, and what it encourages on Cuba’s streets, will leave them… confused.
